tv Titans at the Table Bloomberg May 16, 2015 1:00pm-1:31pm EDT
betty liu: hi. tom steyer: good morning. betty: tonight on "titans at the table" -- this place is gorgeous, it really is. i will be chatting with billionaire businessman turned environmental activist tom steyer. tom steyer was born and raised in the financial capital of the u.s., new york city, but chose to open his investment firm farallon capital management in san francisco. he founded the company in 1986 with $8 million, and by the time he stepped down in 2012, he turned the initial investment into $30 billion, making farallon the fourth-largest hedge fund in the world. his personal fortune is an estimated $2.6 billion. not satisfied with retiring on
the golf course, steyer reinvented himself as an environmental activist, even funding and starring in a series of public service announcements. tom: i am tom steyer. each week, we are taking a look at the keystone xl pipeline proposal. betty: steyer believes building the pipeline will escalate the production of the controversial canadian oil sands. tom: so the question here in my mind was -- is this a chance to change our trajectory in terms of energy? is this a chance to change the way people think about it and the way the policies are shaped around energy? betty: we caught up with steyer in the tiny town of mayflower, arkansas, where he was getting a look at the cleanup site from an estimated 5000 barrel oil spill. [splashing]
genieve long: here is some just off the top of the water. it is sticky. it is extremely sticky. betty: very sticky. genieve: it smells awful. betty: in march 2013, a shallow underground pipeline owned by exxonmobil burst, sending oil running down a mayflower residential street, as can be seen in this video. tom: the smell is unbelievable. i mean, look. there's oil. betty: the oil flowed down the street through a drainage ditch and emptied into a marshy area. the heavy crude had come from alberta, canada, thousands of miles away. tom: what are the booms for? genieve: they are to soak in the oil. they are supposed to -- tom: literally? genieve: yeah. literally -- tom: that is what they are for? genieve: yes. they are supposed to repel water and soak in oil. betty: steyer had come to mayflower to gather ammunition
for what may be the biggest fight of his life -- trying to stop the keystone xl pipeline from being built. steyer worries more leaks like this one in mayflower could happen. the proposed keystone pipeline would stretch from the canadian border across the u.s., and connect to existing pipelines that carry oil to refineries on the gulf. steyer says the oil would be sent directly to the international market. tom: it is not going to the united states. what the true argument is, it is going to be more oil not from the middle east, that is true, but it does not mean it is more oil to the united states. it just means there is more oil not from the middle east in the world market. betty: we walked with steyer along the quiet street in mayflower that just a few months before had been covered in oil. exxonmobil is facing $2.6 million fine for the spill and has spent $70 million to clean it up. the company purchased many of the homes on the block. three houses were so badly damaged, exxon knocked them
down. most sat empty. even after an accident like the one in mayflower, defeating keystone could be a long shot for steyer. if you look at the polls, though, 2/3 of americans do support the keystone pipeline, and that number has not budged in the last two years. tom: it really has not. betty: so, it seems like you are in a minority there. tom: i think that this is a topic on which people, a, do not really understand what it is and, b, it is always presented as either we do this or we do nothing. that is absolutely not true. we are not going to run the society without energy. it is just a question of how we think about it. betty: but keystone is just part of the problem. steyer says the bigger climate issue is how tar sands oil is recovered from the canadian countryside. 20% of the oil is mixed in sandy soil lying just below the surface and is strip mined and spun in centrifuges to separate the oil from the dirt.
the remaining 80% is trapped hundreds of feet below solid rock. steam is injected underground to loosen the oil, and it is pumped out. the thick tarlike crude must be mixed with chemicals to make it flow through the pipeline. tar sands require 70% more energy to extract than traditional oil. tom: this is a gigantic mining operation in the middle of nowhere. they want to take production by 2025, more than double it. betty: and your job is to make sure that never comes out of the ground? tom: well, look, from my point of view -- i am not a scientist. the scientists say it would be devastatingly terrible for the 7 billion people on the earth if it does. betty: when we return, tom steyer looks outside the box for answers. tom: i actually believe that the solution for our energy problem is going to be corporate america. ♪
betty liu: tom steyer claims money did not motivate him, but he was incredibly good at making it. the investment firm he founded, farallon capital management, has a market value of almost $4 billion, and that has made steyer a very wealthy man. if you did not really like using money as a benchmark for your success, you still made a lot of it. how did that work? tom steyer: for better or worse, i am competitive. betty: competitive and diversified. steyer's investment fund, farallon, invests in energy companies, including kinder morgan, a canadian pipeline operator that transports oil sands. but steyer has promised to divest from his kinder morgan holdings and pledged to donate any profits to the victims of western wildfires. now steyers says he looks to the oil industry for answers. tom, tell me how do you take the incident that happened in mayflower with the oil spill and what happened to peoples' lives there, how do you apply that to
the work you are doing now against the keystone pipeline? tom: let's step back for a second, which is this. i actually believe the solution for our energy problems is going to be corporate america and actually will be private enterprise america. when we get the policy framework right, the people in that sphere will come up with creative, imaginative, innovative solutions that will blow our mind. i mean, if you really look at what is happening in the fossil fuels arena, people are being really creative and innovative. some people hate fracking, but fracking is a new technology that somebody from the united states came up with as a way of engineering around an old problem. that is exactly what i expect american business to do.
betty: what you are saying is no, not all corporations are evil, not all corporations are bad, and in fact it is ok to make money as long as it is towards a similar goal. tom: i do not think corporations are evil. what i do not think we should do is rely on corporations for our morality. you know, the truth of the matter is we are a nation of people. and, you know, pretty much -- i hate to say it -- but the law of the land is people who run corporations, their responsibility is to take care of the interest of their stockholders. so that is a very limited world view in my opinion, and that is not the world view i think is going to get us to the broad answer for society as a whole. so i do not actually feel resentful, i take that as a given. and when someone asks, what is exxon's motivation, my answer is their motivation is their stockholders and their corporate net worth. betty: did it make you feel that you needed to do something about what was going on in mayflower? did you feel like you had some responsibility to do something
there? tom: the truth of the matter is what we have been trying to do is get the human story out because that is what other americans can understand and relate to, that experience is something that would have reverberation and impact. betty: when we come back, using money to change politics. tom: big things are happening. thanks to president obama, america is laying the foundation for the way we power tomorrow. betty: you have been a supporter of the president. tom: i have. and i am. ♪
various initiatives and candidates opposed to keystone. you have been effective in many of the initiatives that you have targeted, and you have called some of those initiatives that you have put money into some of the best investments you have ever made. tom: [laughs] they were. betty: is that something you are going to continue to do? tom: i do not know if that is what i will do forever, but i think that i definitely will do that in 2014. betty: in fact, tom is not the only outspoken liberal in the steyer family. his brother jim teaches civil rights courses at stanford and founded commonsense media, a nonprofit organization. the steyer brothers have been compared to another set of politically-minded siblings -- the koch brothers -- but the kochs have spent millions backing tea party candidates and conservative causes. tom: i do not actually know the koch brothers. [laughs] betty: i would not think you would. tom: i definitely think there has to be differences in the
sense that those guys are doing something that is consistent with their self-interests. and -- betty: when you say "self-interests," what do you mean? tom: i mean they are basically pushing stuff that is very good for private enterprise and specifically oil refiners. very consistently, very aggressively, and sometimes very intelligently. i see that as we are on very different trajectory in terms of how we think about it, who we think we are representing, and what we are trying to accomplish. betty: but steyer does have an agenda, one that leans to the left. he spoke at the democratic convention in 2012. tom: big things are happening. thanks to president obama, america is laying the foundation for the way we power tomorrow. betty: he and his wife have given more than $11 million to super pac's he founded, and they hosted a $5000 per person fundraiser with the president at their san francisco home.
you have been a supporter of the president. tom: i have. and i am. betty: well, initially in his first term, he was quite big on climate change, and he was quite forceful in talking about climate change. are you disappointed? tom: i think the president's record through the epa in a regulatory fashion on energy and climate is really good. i think that he really understands this issue. messing this up, you would not see today but in 20 years would be super obvious. and i think they have that perspective. betty: tom, do you have any ambitions of running for office? tom: i have always said that i would do virtually anything to make our agenda come true. and that is true. but i have also tried to be clear that this is not an intelligent, strategic, well thought out self-interested effort to promote myself.
[laughs] so i would say if there came a time where i thought that was really important to do, i would not shy away from it because i felt like i was going to get the bejeezus kicked out of me. betty: you looked like a little bit like a political candidate there at the mayflower diner. [laughter] though he says he has no plans for higher office, steyer stopped to have lunch with some of the victims of the mayflower oil spill while he was in arkansas, and he listened intently like a good politician. what did you learn in the last few years on your quest to get the pipeline? tom: [laughs] well, i have not spent all my time on the pipeline. i spent some time on the pipeline. i think i have gotten a chance to be exposed to more parts of american society than i had been when i was exclusively a professional investor, so i met a bunch of people who -- betty: you may not have met those women? tom: i would never have met. never have met. and i've spent time with them. it is not like where you just say hello, how are you, and have
15 seconds. and so, you know, selfishly, i think that has been really fun and that it has been very good for me. betty: steyer's anti-keystone campaign hit a bump in the road recently. in late january, the state department released an environmental review stating the keystone pipeline is unlikely to impact oil sands production. if the state department report comes out and says look, it is going to happen anyway -- tom: is that a good thing? no. there is no way that is a good thing. betty: in your view, it is not a good thing environmentally, but some would say it would allow the president to say ok, then i will go ahead and approve the keystone pipeline. tom: good. betty: and then what happens to you? tom: [laughs] personally, i will still get up in the morning and eat breakfast. i will feel as if a huge mistake has been made. betty: but i guess my -- if it gets approved, is there still a
fight here at all? tom: i don't know. i have had people talk to me about that. and they have explained to me different ways we could fight. betty: you do not want to look towards that point? tom: i honestly do not, because i feel like we are committed to the idea of making the case right now that this makes no sense. and it is a chance actually for the president to be a global leader in a way that is incredibly relevant and incredibly historically significant. to me, i look at it and go like, someone is giving you on a platter this incredible opportunity, which entirely lines up with your understanding of the world and your understanding of who you want to be in the context of that world. why is that complicated? betty: when we return, tom steyer's paradise. running this huge ranch, how is it different than running a hedge fund, a $20 billion hedge fund? tom: [laughs] ♪
betty liu: the northern california coast is one of the most picturesque places in the united states, so it is no wonder this is where billionaire tom steyer spends his time. just a few miles inland from the pacific is the 1800-acre ranch steyer and his wife kathryn taylor bought in 2002. only an hour outside of san francisco, it is a world away. buying this ranch, was it your idea or your wife's idea? tom steyer: i think you can only blame my wife for that one. [laughter] originally we bought it because the land had been so misused, you could dump stuff here if you
paid them a fee. there had been a d.e.a. raid. they were -- had people -- betty: why? tom: i think they were growing dope. betty: oh. tom: [laughs] betty: running this huge ranch, how is it different than running a hedge fund, a $20 billion hedge fund? tom: [laughs] well, i will tell you how it is the same and how it is incredibly different. it is the same in the sense that you think this looks like an asset, but it is actually dramatically changed by the people who run it. and that is exactly like every organization i have been in, which is, having great people, particularly at the top, is unbelievably significant and powerful. and that is where the comparison ends. betty: how much have you had to put into this? tom: i try never to ask that question. [laughs] because, you know, we have done -- we have rebuilt every building. kathryn really felt as if raising grass-fed cattle was something that would be a good thing to do and a fun thing to do. betty: tomkat ranch has a staff of 15, including scientists who are studying ecologically friendly ways to raise cattle. tom: you basically move the
animals from place to place, and that is actually how -- they call them ungulates -- the big herds of animals have moved across the plains of the earth. i think at this point what we would think of is real success is if it turns out scientifically that we are right, that the way we are grazing the different animals causes the land to soak up twice as much carbon as normal. betty: steyer has always bucked against conventional wisdom. he and his wife chose to settle here on the west coast near their alma mater, stanford university, and thousands of miles from wall street. tom: i intentionally chose not to live in new york city, which is the center of investment in the united states. i never felt as if i was really part of that community, even though i had lots of friends in it. but you know the old saying "the person who has the most toys when they die wins"? that is insane, right? why would that be true? and the idea that if you make -- i remember when i first started
farallon, i was talking to someone about an investment situation, and there was someone who was trying to take control of the company, and i said, "now, that guy is an idiot." and the person i was talking to said, "he's worth a lot more money than you are, tom. i do not think he could be so stupid." i started thinking, "am i dumber than everybody who is richer than me?" and i think, no. [laughter] and i am not smarter than everybody i am richer than. betty: is that why you left wall street? tom: i just did not think -- i did not think it would be a great place, and i do not think my wife thought it would be a great place, to have little kids. and you know, if you like the outdoors, i mean, we are sitting in pescadero, california, in the outdoors, and it would be hard to recreate. betty: steyer tries to get out to his ranch a few times a week. in addition to raising grass-fed cattle, the ranch plays host to local school children who come to visit dorothy, the 300-pound
pig. tom: the normal rule is do not name it if you want to eat it, right? [laughter] but this really is the equivalent of a petting zoo. we could go inside the -- betty: so the kids come here? tom: or they go inside and feed them and do all that stuff. here comes dorothy. betty: oh, there she is. tom: let me ask you a question. do you have an apple for her? [laughter] betty: do we have an apple? tom: no. if we were smart -- that is what she is interested in, not us. betty: look at her walk. tom: i know. betty: tom steyer seems to have moved comfortably from ceo to his new role as environmental caretaker, but it remains to be seen if his passion and deep pockets are enough to conquer keystone. tom: i think that my parents had a strong sense of participating in their community, which is all i really think i am doing. ♪
betty: tonight on "titans at the table" we will be talking football and the big apple. >> there will be a coin toss right here. betty: with the man who is bringing it all together. jonathan tisch, co-chairman of the loews corporation and co-owner of the new york giants. he was born and raised in a new york family. in 1959, his family branched out and bought loews theaters.